Poland: Premium housing is going up
The choice of apartments located in the best, prestigious locations in the center of Warsaw is not large, due to the limited supply and a small land bank. Therefore, buildings with premium housing will grow upwards, as will demand and prices.
Last year, there were many opinions announcing a standstill in residential real estate and price drops, which was supposed to be related to the coronavirus pandemic and the collapse of the economy. However, as it turned out, flats are selling very well and their prices are still going up. This largely applies to premium real estate.
Data on the number of transactions based on systematic market monitoring carried out by JLL confirm the growing interest in real estate in the apartment segment. The average quarterly sale of apartments in Warsaw in the first half of 2021 was approximately 20% higher than the average quarterly sale in the period from 2018 to 2020, despite the constantly decreasing offer. In 2018 - 2020, on average, in the quarter, approx. 20% of the current offer in the apartment segment was sold, while in the first half of 2021 it was already approx. 35-40%.
Deficit of apartment buildings in the center:
In April, developer Asbud started the construction of Towarowa Towers, i.e. two 95-meter high residential towers located at ul. Prosta near Rondo Daszyńskiego in Warsaw. He has planned almost 600 apartments of various sizes in the range from 25 to 140 sqm and a four-storey underground garage. The high demand for this type of premium flats is evidenced, for example, by the fact that, shortly after the start of construction, about 40% of flats in the first tower were already sold.
The choice of apartments located in the best, prestigious locations in the center of large cities is not large, due to the limited supply and a small land bank. Therefore, plots in the best locations will probably be developed more vertically than horizontally. Just look at global cities where this trend is already well developed. The apartment in high-rise buildings provides not only panoramic views of the city, but also modern solutions for the comfort of residents.
"Most apartments in Towarowa Towers will have a balcony or loggia, which is not common in comparable premium skyscrapers. For future residents, a common space with terraces with a relaxation zone has been planned, as well as many amenities: fitness clubs, lounge rooms and a room for business meetings. The entire area of these amenities at Towarowa Towers will take up over 400 sq m, and the terrace will take about 900 sq m. The towers will also feature a representative lobby with an eye-catching graphic motif," says Raied Tanous, CEO of Asbud.
Stable growth in value:
Premium real estate clients appreciate turnkey apartments. For example - Towarowa Towers offers three finishing standards to choose from. Buying a flat with finishing touches can be profitable not only due to the several-year warranty from the developer and timely execution. The prices of finishing materials are rising quickly, and the purchase of an apartment with a finish will guarantee its price for several years ahead.
Luxury flats are highly resistant to economic turmoil, and their value increases. According to information from JLL - data on average prices of premises offered in Warsaw since 2014 show that the price of luxury apartments increased by 68%, and the price of the entire offer - by 52%. The analysis of luxury apartment transactions on the secondary market shows the average annual increase in the price of apartments at the level of approx. 6.2%. For some transactions, this increase was as high as 10% per annum. The above data show both an increase in interest in the apartment segment, but also a stable increase in the value of premium real estate in the long term. Therefore, it is not surprising that there is a growing interest in investing in premium premises.